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GWU Student-Led Investment Club Exceeds S&P Index Performance

BOILING SPRINGS, NC (April, 2004) -- The Student Investment Club at Gardner-Webb University (GWU) has consistently out-performed the S&P Index for the past five years. Four years ago, a generous grant from BB&T of $5,000 per year was given to the club for a duration of five years to provide students the opportunity to learn from investing real monies. As of March 15, 2004, the club boasts a portfolio worth $21,730 after deducting all fees and trading costs.

According to Dr. Philip Swicegood, faculty representative for the club and GWU School of Business finance professor, the students spend considerable time researching the companies and their potential investments. The club comes together on the third Thursday of the month, with each research committee bringing suggestions to the group for consideration. After formal presentations and rigorous debates, most of these possibilities are rejected, but a few meet club approval.

"We are very aggressive, yet very demanding," says Swicegood. "The club approaches their search for superior stocks by asking, 'Will it outperform the S&P 500?' Most portfolio managers in this country are judged based on how they perform against the S&P 500, so we use that same criteria as well. That way students know how they are doing, even against professional money managers. And so far, these students are actually beating most professionals over the four-year history of the club."

Swicegood emphasizes that the students themselves make the decisions on which investments to pursue, while he does the data entry for their account. "I ask the hard questions, but they make the final judgment call," he says. "So any credit really belongs to the students and their emerging analytical skills." Their current portfolio consists of 12 companies' stocks from various industries.

Below is a breakdown of the S&P performance compared to the performance of the Student Investment Club:

Year S&P Index Performance GWU Student Investment Club
2000 -09.19% +04.01%
2001 -12.28% +00.84%
2002 -23.37% -21.21%
2003 +26.40% +30.25%
2004(ytd) +02.69% +4.73%

The Investment Club hopes to accumulated enough profit to create its own scholarship for future business majors. The club is open to all Gardner-Webb students.

Join Today!

Joining SIC has numerous benefits, even for non-business majors.

Do you know what it is that makes a security investment-grade or junk-grade?  Do you know the difference between a stop and a limit order?  Do you know what a P/E ratio is and what it is used for?  If you answered an emphatic NO to all of these questions, you could be in for trouble.  With scandals in the halls of prestigious investment companies, and retirement plan disasters in the corporate environment, a future employee must know how to manage and invest his or her wealth in order not to lose it.

This is where SIC steps in.  By researching and presenting stocks and making decisions on our actual $25,000 portfolio, we all learn together about the world of investing, ensuring that all of us will one day have the ability to make smart investment decisions, like knowing that a bond with a rating of BBB or higher is investment grade and therefore safer in regards to default risk than a BB rated bond.  By teaching how stocks and the markets work, students can find mechanisms to place profitability at their fingertips, such as putting in an order to buy at a certain price (limit order) or sell at a certain price (stop order).  Finally, SIC shows students how to effectively analyze a company and objectively tell whether or not it is a good long term investment.  Items used in this valuation are Income statements, balance sheets and annual reports, among others.  It could show that the Price to Earnings ratio (P/E ratio) is substantially below competitors and therefore undervalued.

There is much to know in the world of investing, and it can be daunting even for people who are relatively familiar with the markets, however by joining the SIC the markets will become more and more familiar and in time we hope you will become an educated and confident investor.

Participation in the SIC can also yield extra credit in many undergraduate classes; be sure to ask your professor if credit can apply.

Money talk aside, most importantly SIC is fun.  Although some research and math are involved, there is a great sense of camaraderie and teams spend a great deal of time talking and even laughing about companies over a cup of coffee.

If you are interested in joining the student investment club or attending a meeting, please contact one of our officers or send an email to pswicegood@gardner-webb.edu.  Thank you for your inquiry.

-GWU SIC

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